Investing in vanguard?

Question

I am considering opening a roth ira at vanguard and am not sure which investment type to pick. Vanguard mutual fund - Vanguard's family of no-load stock, bond, and money market funds provides investment options for nearly every financial goal.....OR..... stocks, bonds, ETFs, and non-Vangaurd mutual funds - A Vanguard Brokerage Services® account enables you to invest in stocks, bonds, ETFs, CDs, and funds from hundreds of mutual fund companies. You'll select a money market fund now and make purchases after your account is open.

I also wanted to start a mutual fund at vanguard, but there are a few options of what fund to choose and i'm not sure which is best. How do i determine which one to go with? I think i want to go with one that is more risk/more reward.

Would it be best to do a roth ira and a mutual fund or just one for now? I have about 6k to start with. I am 24 so these will be long term investments for me.

Thanks!

Answer 1

An Roth IRA allows you to invest for retirement.  There is no tax deduction when you put the money in but there are no taxes due when you with draw at retirement.

Go ahead and open an account.  Check out their total stock fund.  They specialize in index funds and low costs.  Not much to think about when in   index funds but cost and timing.

Answer 2

Your  ROTH max for this year would be $ 5000....go ahead, open it...you will eventually learn to invest in it... probably one diversified mutual fund to start with...for about $ 3000.  Then for your more risk/ more reward portion...look at some ETFs...you can buy through your Vanguard account...they have a few ETFs, but the whole scope of the market is open to you in other companies as well. ( All " tradeable" in your Vanguard Roth )

Do just a little reading ...and then pick a " sector" that looks good: Solar ? Ag/chemicals? Energy? Oil services ( drillers, etc) ?  Alternative energy? Nat gas?  It's all available...and you will quickly learn to buy- in, watch results... settle for gains? or take profits?..hang-in? or move on ?

Most importantly, it's all " inside" the ROTH...so everything you make is YOURS...( someday)...a great way to secure your own future.

...and you are right in being " risky" now... take a few chances on building up a nice bundle NOW...that will gain and gain over the years...The bigger the bundle at the beginning, the greater the " snowball" effect.

...next year your max moves up to $ 6000.  so don't forget to save for that, too.

Answer 3

A roth IRA is simply a shell, within which you can buy stocks, bonds, mutual funds, money markets, CD's, etc.  So go ahead & open a roth, and I would get Vanguard's Target Retirement 2040 fund VFORX(within your roth).  

Poster #1 suggestion about a total market index is also a good one.  I could live with that.  I just think the 2040 fund is a little more diversified.

You seem a little unsure on how to invest.  Go to your library or bookstore & browse thru the business/investing section.  Lots of books on the subjects of money & investing.  I like Investing for Dummies by Eric Tyson (which I have).  It will teach you some of the basics.